Business World Online
Posted on February 17, 2011 11:45:27 PM
THE GOVERNMENT, a decade after the passage of a reform law, may have finally achieved the preconditions to implementing "open access" and retail competition in the power sector.
Energy officials told a congressional oversight body yesterday that the last of the requirements -- privatization of 70% of power capacities contracted with private or independent power producers (IPPs) -- had been attained following a decision to hold the sale of a contract involving a plant in Rizal.
The privatization of 70% of state power generation assets, another condition under the Electric Power Industry Act (EPIRA) of 2001, was met in July 2009 with the sale of the Calaca plant in Batangas to the Consunji group.
The previous Arroyo administration wanted to fast-track the sale of "IPP Administrator" or IPPA contracts to reach the 70% threshold but reached only 68% with the sale of the contracted capacity of the Ilijan plant to San Miguel Corp. in April last year.
Energy officials now hold the view that calculations need to be revised with the build-operate-transfer contract for the 650-megawatt Malaya plant expiring ahead of the sale of its IPPA.
Energy Secretary Jose Rene D. Almendras told BusinessWorld the 70% requirement had been breached. "Yes we have, subject to the Energy Regulatory Commission’s (ERC) confirmation of the percentages. Decisions will have to be made on the infrastructure to be set up so it can be worked on, so technical requirements for open access can be completed," he said in a text message.
Open access will allow those consuming one megawatt of electricity a month to choose their own suppliers. Retail competition will allow other new entities to supply power to large consumers, providing competition to distribution utilities. These are supposed to bring down power prices.
The ERC, tasked by law to make the official declaration of open access and retail competition, will conduct public hearings next month to verify the Energy department’s calculations.
"It was disclosed at today’s [Joint Congressional Power Commission] meeting that the last remaining precondition for open access and retail competition ... was already complied with," ERC Executive Director Francis Saturnino C. Juan said in a telephone interview yesterday.
"For its part, the ERC shall shortly issue the order to initiate the process to ... confirm compliance ... and if indeed this is the case, to determine the appropriate commencement date for open access and retail competition," he added. -- ENJD
The privatization of 70% of state power generation assets, another condition under the Electric Power Industry Act (EPIRA) of 2001, was met in July 2009 with the sale of the Calaca plant in Batangas to the Consunji group.
The previous Arroyo administration wanted to fast-track the sale of "IPP Administrator" or IPPA contracts to reach the 70% threshold but reached only 68% with the sale of the contracted capacity of the Ilijan plant to San Miguel Corp. in April last year.
Energy officials now hold the view that calculations need to be revised with the build-operate-transfer contract for the 650-megawatt Malaya plant expiring ahead of the sale of its IPPA.
Energy Secretary Jose Rene D. Almendras told BusinessWorld the 70% requirement had been breached. "Yes we have, subject to the Energy Regulatory Commission’s (ERC) confirmation of the percentages. Decisions will have to be made on the infrastructure to be set up so it can be worked on, so technical requirements for open access can be completed," he said in a text message.
Open access will allow those consuming one megawatt of electricity a month to choose their own suppliers. Retail competition will allow other new entities to supply power to large consumers, providing competition to distribution utilities. These are supposed to bring down power prices.
The ERC, tasked by law to make the official declaration of open access and retail competition, will conduct public hearings next month to verify the Energy department’s calculations.
"It was disclosed at today’s [Joint Congressional Power Commission] meeting that the last remaining precondition for open access and retail competition ... was already complied with," ERC Executive Director Francis Saturnino C. Juan said in a telephone interview yesterday.
"For its part, the ERC shall shortly issue the order to initiate the process to ... confirm compliance ... and if indeed this is the case, to determine the appropriate commencement date for open access and retail competition," he added. -- ENJD
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